Member Survey: Inform the CAFP Board of Directors as they consider Ballot Initiative 181

With the federal passage of HR 1 on July 4, 2025, Colorado has been tasked with cutting the state budget by $1.2 billion this fiscal year (July 1, 2025 – June 30, 2026), and by $800 million in fiscal year 2026-2027 in order to keep a balanced budget, as required by the state’s constitution. These required cuts, along with the budget limitations of the Tax Payer Bill of Rights (TABOR), have tasked the state with difficult decisions regarding funding. Essential programs such as Medicaid and education, which each represent a third of the state budget, will have to make dramatic reductions. These challenges have inspired new approaches to support the state budget, one of which is the Graduated Income Tax Ballot Initiative being led by The Bell Policy Center and the Protect Colorado’s Future Coalition. 

Colorado’s state budget is unique due to the adoption of TABOR in 1992. Its passage has resulted in two major impacts to the state. First, it limits what types of taxation the state can implement and requires that any changes in taxation must be voted on by the people of Colorado. Second, TABOR limits the growth of the state budget. Every year since 1992, the state budget has been adjusted for inflation and population growth and capped. This is the reason that Colorado taxpayers receive TABOR refunds every year, and is why creating a balanced budget can be a challenge, especially in light of the impacts of HR 1. 

In Colorado, Medicaid was cut by $13.5 million in general state funds and $28.2 million in federal matching dollars in fiscal year 2025-2026, resulting in total cuts of $41.7 million.  For fiscal year 2026-2027, $196 million in general state funds were cut, along with $334.1 million in federal matching funds, resulting in a loss of $530.1 million for the state. Additional reductions are expected.

As Colorado faces these dramatic cuts, organizations like the Bell Policy Center have been looking for solutions. This has resulted in the formation of the Protect Colorado’s Future Coalition which includes:

• The Bell Policy Center
• Colorado Blueprint to End Hunger
• Colorado Center on Law and Policy
• Colorado Children’s Campaign
• Colorado Consumer Health Initiative
• Colorado Cross-Disability Coalition
• Colorado Fiscal Institute
• Colorado Organization for Latina Opportunity and Reproductive Rights
• Colorado Statewide Parent Coalition
• Counties & Commissioners Acting Together
• Great Education Colorado
• New Era Colorado

This group is championing Ballot Initiative 181, the Graduated Income Tax, which voters would have the opportunity to consider in the November 2026 election. This initiative would decrease taxes for lower income Coloradans and increase taxes for higher income Coloradans. Generated revenue would go towards reducing the shortfalls of the current state budget. These investments include replacing lost funds for Medicaid, increasing funding for primary care, supporting healthcare for older Coloradans, and decreasing Affordable Care Act (ACA) insurance premiums. These priorities align with CAFP’s member-identified priorities to protect Medicaid services and reimbursement rates, improve access and affordability, strengthen primary care, and ensure stable funding for Medicaid and underserved communities. CAFP’s involvement in the coalition at this stage would mean the opportunity to help direct subsequent funding decisions impacting family physicians and patients were the initiative adopted by voters. Engaging on a taxation ballot initiative would be a new form of engagement for CAFP. By taking this survey, you help inform the CAFP Board of Directors and shape their decision on whether to engage in this initiative.

For more information on the ballot initiative please read the finalized language, visit the Bell Policy Center webpage, and check out the factsheet.